Terrorist attack in Nairobi

On Tuesday, a deadly terrorist attack claimed by al-Shabab shook Nairobi, with official fatalities rising to 21 people by the end of the week, according to Reuters. The attack, which took place on a hotel and office complex, started when gunmen threw bombs at vehicles in the parking lot and then entered the lobby of the building, where one detonated a suicide vest. The gunmen then made their way through the compound while opening fire.

While earlier government reports stated that the complex had been secured late in the evening on Tuesday, more heavy gunfire occurred on Wednesday morning as security forces continued combing through the building to rescue civilians who had barricaded themselves into rooms. Twenty hours after the attack began, Kenyan President Uhuru Kenyatta announced on Wednesday that the siege was over and “all the terrorists have been eliminated.”

Of the victims, 16 were Kenyan, one was British, one was American, and three were of African descent but have not yet had their nationality identified. The Red Cross office in Nairobi reported that at least 30 additional victims had been treated in medical facilities nearby.

Protests over fuel price increases and low living standards in Zimbabwe

Thousands of Zimbabweans protested this week, prompted by trade unions’ calls for a three-day national shutdown, in opposition to falling living standards and the government’s decision to more than double the price of fuel. This call for protests came shortly after the announcement of a strike by public school teachers and the end of a 40-day strike by doctors demanding pay in U.S. dollars and better working conditions.

The protests had mostly ended by Thursday, with businesses and banks reopening in the capital of Harare, but still pose a major challenge for President Emmerson Mnangagwa, who pledged to create jobs and attract foreign investment after his election in late 2017. Zimbabwe still faces shortages of foreign exchange, fuel, and medicine, as well as high inflation.

In his essay, Mo Ibrahim, founder and chair of the Mo Ibrahim Foundation, highlights improvements in overall governance but limited progress on indicators related to youth. According to data from the 2018 Ibrahim Index of African Governance (IIAG), scores on the Education indicator measuring educational outcomes worsened for 27 countries, representing more than half of the continent’s youth over the past five years. Further, despite strong economic growth over the past decade, IIAG shows little improvement for Africa on the Sustainable Economic Opportunity indicator, highlighting the employment challenge for youth entering the workforce. He notes the need “to make sure the voice and expectations of the youth are included in policymaking.” In another Foresight Africa essay, Thione Niang also stresses the need to “elevate the voice and representation of young people in government.”

Given this focus on youth representation and inclusion, Figure 1.4 from the report presents some data on the issue. As the top figure shows, the median African leader is eight years older than the median OECD leader. As the distribution highlights, most African leaders are over 55 years old with several leaders over 75 years old. This contrasts sharply with the continent’s very young population at a median age of 20 years old. The age gap between the region’s population and leaders is also much larger, at 42 years, compared to the OECD’s 12 years.

Looking at parliamentary representation, 14 percent of sub-Saharan Africa’s parliamentarians are under 40 years old, close to the world average. However, it should be expected to be higher given that 70 percent of the region’s population is under 30 years old.

In 2019, general elections will be held in many African countries, offering them an opportunity to deepen, consolidate, and institutionalize democracy and strengthen their governance systems. Nevertheless, as the 2018 presidential elections in several African countries have shown, without a governing process supported by true separation of powers, effective checks and balances, an independent judiciary, a free press, and a robust and politically active civil society, the 2019 elections will most likely have limited impact on freedom and equality across the continent.

Priorities for the declared winners of the 2018 elections

In Cameroon, President Paul Biya emerged victorious, unsurprisingly, having supposedly captured 71.28 percent of the vote. Several opposition candidates and ordinary Cameroonians pointed to massive fraud. In addition, the election was marred by high levels of insecurity and violent extremism in at least three of the country’s 10 regions—the Far North, Northwest, and Southwest regions. The violent response by the security forces to peaceful protests by teachers and lawyers against the political and economic marginalization of the Anglophones by the Francophone-dominated central government has morphed into what is being described by the international community as genocide. The “re-election” of Biya for another seven-year term has all but killed any prospects that the 2018 election would lead to the deepening and institutionalization of democracy in the country, as well as significantly improve the security situation in the country, one of Cameroon’s top priorities.

An effective way to fight terrorism and other security threats in Mali and the broader Sahel region is to promote political and economic inclusiveness.

In Mali, incumbent President Ibrahim Boubacar Keïta was reelected for a second term with 67 percent of the votes cast. Although there were allegations of irregularities, the African Union adjudged the elections credible and transparent. Other observers argued that the elections were credible but raised concerns. This election was supposed to dispel Malians’ chronic mistrust of their political institutions, which emanates from the government’s failure to deal with human rights violations, corruption, and nepotism. President Keïta’s regime must now deal fully with corruption and impunity, as well as address pervasive poverty, high levels of material deprivation, and political and economic marginalization. It must also be understood that the foundation of an effective way to fight terrorism and other security threats in Mali and the broader Sahel region is to promote political and economic inclusiveness, as well as the protection of human rights.

In the Democratic Republic of Congo (DRC), the term of President Kabila expired in 2016. After postponing the elections for two years, they were finally held last December, but excluded Moïse Katumbi, the popular former governor of the Katanga Province. The focus for the new regime must be nation building and the effective elimination of threats to peace and security. To accomplish this goal, the new government must be inclusive and must pre-occupy itself primarily with state reconstruction to provide the country, through a participatory, inclusive, and people-driven process, with institutional arrangements that are capable of promoting peaceful coexistence and enhancing inclusive economic growth.

Key elections to watch in 2019 are those in Nigeria and South Africa

Nigeria will hold general elections on February 16, 2019, to elect a president and members of the National Assembly. Muhammadu Buhari, who was elected president in 2015, is seeking re-election. The 2019 elections will be the sixth national electoral exercise since transition to democracy in 1999 and an opportunity for Nigerians to undertake peaceful change of government as they had done in 2015. As many as 16 other individuals have declared their intention to contest the presidential race. As candidates prepare to articulate and bring their platforms to the electorate, there is fear that the elections will be marred by violence.

While many observers see Boko Haram as the greatest threat to peace and security in Nigeria, and hence, to the 2019 general elections, it is important to also recognize the various structural and institutional problems that plague the country. These include, but are not limited to, severe inequalities in wealth and income distribution, religious and ethnocultural divisions, and weaknesses in the political, administrative, and judicial foundations of the state, which have produced high levels of bureaucratic and political corruption, including public financial malfeasance.

An emerging and important threat to peace and, in particular, the election, is the violent conflict between farmers and herders over land- and water-use rights. In fact, in some states in northern Nigeria, many of these clashes have become deadly. Government, at both national and local levels, remains incapable of dealing effectively with extreme poverty and providing all Nigerians with effective mechanisms for self-actualization.

Finally, Nigeria’s political parties continue to suffer from in-fighting and are proving incapable of improving the state of democracy in the country. Despite the tremendous improvements that have been made since transition to democracy in 1999, Nigeria has not been able to provide itself with a governance system capable of adequately constraining the state and, hence, preventing civil servants and politicians from acting with impunity.

South Africa will also hold general elections in 2019 to choose members of the National Assembly and new provincial legislatures in each of the country’s provinces. The 2019 elections will be South Africa’s sixth since 1994 when apartheid was abolished. Since the National Assembly chooses the president after the election, the next president is likely to be a member of the political party that captures most of the parliamentary seats. The incumbent president, Cyril Ramaphosa, who was elected to a five-year term as president of the African National Congress (ANC), will lead the party to this year’s elections.

While corruption and state capture are likely to be key issues in the 2019 elections, inequality in the distribution of wealth and income, most of it made possible by apartheid-era policies, will definitely be an important issue for candidates to address. In addition to the continued lack of opportunities for the country’s majority black population, political parties are likely to be asked to address the issue of inequality, including the redistribution of land, a problem that has made South Africa one of the most unequal countries in the world.

While many observers see Boko Haram as the greatest threat… it is important to also recognize the various structural and institutional problems that plague the country.

Despite South Africa having the continent’s most progressive constitution and a governing process characterized by separation of powers, with an independent judiciary, many citizens remain trapped in poverty and suffer from high levels of material deprivation. Thus, for the country’s main opposition political party, the Democratic Alliance, to be competitive against the ruling ANC, it must provide voters with a platform that adequately addresses issues such as wealth and income inequality, including land reform. Of course, the ANC remains burdened by its leadership problems, corruption, and the belief, by many of its supporters, that it has abandoned the ideals and values that gave impetus to the struggle against apartheid.

The importance of holding fair and freely contested democratic elections in Africa

Elections are a critical part of each country’s democratic system. Elections can provide vulnerable and marginalized groups (such as, ethnic and religious minorities) with the opportunity to fully articulate their concerns or interests, make them part of the national discourse, and possibly have them included in the national agenda. But this is most likely to happen only when the elections are fair, free, regular, and credible and undertaken in countries with strong democratic institutions.

Hence, a critical lesson from African elections in 2018 is that, while they are an important part of the process of deepening and institutionalizing democracy, they can only play this role within countries whose institutional arrangements are undergirded by the rule of law. Only then can elections help consolidate democracy.

On March 21, 2018, in Kigali, Rwanda, Africa took the giant step of creating a large and integrated market by establishing the African Continental Free Trade Area (AfCFTA). As of November 2018, the agreement had 49 signatures and 12 ratifications (Chad, Côte D’Ivoire, eSwatini, Ghana, Guinea, Kenya, Mali, Niger, Rwanda, Sierra Leone, South Africa, and Uganda). Although a minimum of 22 ratifications are required for the agreement to enter into force, advocacy continues to push to have all African Union member-states onboard so that we can have a truly integrated market that completely removes the historical pattern of smallness, isolation, and fragmentation of our economies and the consequential lack of competitiveness. The stakeholders for the agreement are wide, including women, youth, private sector, civil society, academia, parliamentarians, and cooperating partners. A business guide and handbook to the AfCFTA have been published to assist in advocacy.

Preparatory work to make the market operate continues in areas like rules of origin, liberalization of trade in goods and services, and establishment of a digital payments and settlements systems. We are also developing regional value chains to supply the market and competitively link Africa to global value chains.

The most critical challenge we face is to bring the AfCFTA into operation in 2019 and double intra-African trade by 2022 once tariff and non-tariff barriers are removed. We also face the challenge of bringing about win-win outcomes given that the AfCFTA will be a diverse membership of least-developed, landlocked, small-island, and lower and upper-middle countries, as well as countries in conflict.

The African Union is taking action to break down barriers and improve the flow of goods, people, and capital.

There is the added political challenge. Some of our interlocutors who were skeptical that we would succeed in negotiating the agreement are now saying we lack the collective capacity to implement it. Strong political and popular will, focus, and resilience to generate tangible outcomes will enable us to meet these and other challenges.

Mandela once said, “It always seems impossible until it is done.” In that spirit, we will make the AfCFTA work.

Some of our plans for the implementation of the AfCFTA are as follows. Member states will formulate and implement national AfCFTA strategies. At the regional level, the African Union is taking action to break down barriers and improve the flow of goods, people, and capital. For instance, we are implementing the World Trade Organization’s Trade Facilitation Agreement through our Trade Facilitation Strategy to make Africa a better global competitor. Further, in January 2018, the AU launched the Single African Air Transport Market and opened for signature the Protocol to the Treaty Establishing the African Economic Community Relating to Free Movement of Persons, and Right of Residence and Right of Establishment. Work is underway to conclude by 2020 the negotiation of Protocols on Investment, Competition and Intellectual Property Rights. Through these, the AfCFTA is already moving toward an internal market free of physical, technical, or fiscal barriers.

What is more, the AfCFTA is on a historical fast track. We expect the AfCTA to take effect faster than the five-year average for AU legal instruments to enter into force. With that, states will benefit sooner from the pooled and expanded sovereignty. We are confident that this landmark agreement will deliver decent livelihoods for all Africans in line with Agenda 2063.

That corruption and poor governance are key factors holding back Africa’s development are notions deeply embedded in the literature and thought on Africa’s socioeconomic development. What is not so common is discourse and success stories about how to systematically fight this corruption. Though this may sound discouraging, I can tell you, from my experience, that it is indeed possible to fight corruption successfully with the right knowledge, patience, and commitment to transparency.

To fight corruption, we must first understand it. Underlying the various forms of corruption—grand, political, and administrative, which include public resource transfers to private entities, allocation of public resources to political allies, and misuse of public funds—are three important factors. The first is a lack of transparency of critical financial and other information central to economic development, in particular revenues and budgets. Second is the weakness or total absence of institutions, systems, and processes that block leakages. Third is the pervasiveness of impunity—limited political will to hold accountable and punish those found guilty of such corruption.

Between the three, the tougher problem is how to build strong and enduring institutions. Building institutions takes time and does not deliver the quick results that typically attract politicians or donors. But it is essential if Africa is to fight corruption systematically and ensure long-term stability. We are fortunate to now have technology that enables us to build electronic platforms to manage government finances, biometric systems to bring integrity to our personnel and government payment systems, and web-based platforms to provide transparency of government finances. We need to go even further to see how we can deploy blockchain and other emerging technologies to underpin our contract negotiations and procurement systems, a huge source of corruption and leakage in many countries.

Africa needs to focus its anti-corruption fight on long-term, high-return institution building activities, coupled with the justice infrastructure and political will to hold those who transgress accountable.

We should combine these efforts with building strong and independent audit and justice systems, including a well-resourced judiciary and an oversight office to field complaints. We also need to create an environment that enables strong and accountable civil society organizations that provide oversight of government. Such strong and independent institutions have a salutary effect on political will as they exert the necessary pressure on politicians, even at the highest levels, to act. Such initiatives take patience and determination though, since building these institutions, systems, and processes may take a decade or more.

My experience in Nigeria showed that a decade spanning three administrations was necessary to build well-functioning technology platforms for managing the country’s finances. The savings in terms of blocked leakages, amounting to over a billion dollars, made it worthwhile.

We found that supporting institution building with openness and transparency of revenue and budgetary data provides a win that can be implemented quickly. The increasing accessibility of the inter net via mobile phones and various analytic apps makes it easier now more than ever to share with citizens information on revenues and expenditures. Publishing monthly data in national newspapers on local, state, and federal government revenues was unprecedented in Nigeria when we started in 2004, but it helped us gain public support for our initiatives going forward. It laid the basis for much more sophisticated analytics on the budget shared widely via the internet today.

Africa needs to focus its anti-corruption fight on long-term, high-return institution building activities, coupled with the justice infrastructure and political will to hold those who transgress accountable. This process should start by making key government statistics open and transparent, enabling citizens to keep on top of important information and build trust in their governments. Only with these pragmatic approaches can the continent record wins against corruption.

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Tue, 15 Jan 2019 16:10:13 +0000https://www.brookings.edu/?p=557913

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By Brahima Coulibaly

Each year, our scholars and other Africa experts contribute their thoughts on the top priorities for Africa for the upcoming year. Again, this year, the Brookings Africa Growth Initiative team would like to open the floor and hear from you: Specifically, what do you think should be the top priority for Africa in 2019?

On Thursday, unions rejected the government’s proposal for a 10 percent raise starting in April. Addressing the rejected offer, the Zimbabwe Teachers Association president noted, “The expectation was that there would be a cost-of-living adjustment commensurate with inflation with immediate effect.” The currency crisis has caused inflation to soar, hitting 31 percent in November, a 10-year high. The currency crisis has also exacerbated a fuel shortage with black market prices for petrol reaching $5 per liter compared to the market price of $1.40.

Failed Coup Attempt in Gabon

On Monday, an attempted coup was quickly quashed in Gabon. Staged in Libreville, the coup was motivated by the absence of President Ali Bongo Ondimba who has been in Morocco since October receiving medical treatment. The episode began early in the morning, when songs from the campaign of Jean Ping, Mr. Bongo’s chief opponent in the 2016 presidential election, were broadcast over national radio. When authorities called the station, Lt. Kelly Ondo Obiang, leader of the self-declared Patriotic Movement of the Defense and Security Forces of Gabon, answered and announced a coup would follow shortly. According to reports, the coup plotters were low-ranking military officers.

The World Bank Group recently released the “Doing Business 2019” report, their 16th annual report comparing business regulations in 190 economies. The report advocates for regulatory quality and efficiency reforms affecting 10 areas of business activity, such as starting a business, getting credit, and trading across borders, as well as features of labor market regulations.

Overall, as Figure 1 shows, low- and lower-middle-income economies have made more improvements since 2005 than upper-middle- and high-income countries. Additionally, in 2018, the majority of reforms were made in low- and lower-middle-income economies, with 73 percent of the former and 85 percent of the latter making reforms in at least one business area. Slowly but consistently, these economies, which generally started with weak regulatory institutions and costly, inconvenient business regulation processes, have been converging upon international standards for good “Doing Business” performance.

Figure 1: Low- and lower-middle-income economies have made bigger improvements over time

The report found that sub-Saharan Africa holds the record for the highest total number of “Doing Business” reforms over the past 15 years, at 905 total reforms. Despite these improvements, large gaps still exist between the performance of sub-Saharan African countries and OECD countries. While five of the top 10 most improved economies in “Doing Business 2019” are in sub-Saharan Africa, the region’s average score for overall ease of doing business is less than 40, compared to 73 in high-income OECD economies. As shown in Figure 2, the gap exists across all indicators, and is particularly wide in the areas of resolving insolvency (44 points), trading across borders (41 points), and getting electricity (36 points). Poor infrastructure, weak governance, lack of access to financial resources, and underdeveloped legal institutions in Africa are some factors contributing to the gaps.

Figure 2: Resolving insolvency is the area with the biggest gap between sub-Saharan African economies and OECD high-income economies

Across Africa, there are large variations in country performance. Mauritius and Rwanda rank highly in overall ease of doing business, at 20th and 29th in the world, respectively, while Somalia and Eritrea are the worst performers among all ranked countries. Mauritius and Rwanda’s improvements in regulatory environment have been due to comprehensive and continuous reforms in almost all areas measured by “Doing Business” over the past decade, which have made them the only sub-Saharan African country in the top 20 and the only low-income economy in the top 50, respectively.

The report states that the success of these countries, as well as other high performers in Africa, presents an opportunity for policymakers to learn from the experience of their neighbors. Countries scoring poorly in the area of getting credit, for example, could learn from the experience of Rwanda and Zambia, both ranked third globally in this indicator. Furthermore, policymakers should work to ensure that reforms target all areas of regulation, as many countries may score highly in one or two areas but poorly in others, which can present challenges to entrepreneurs and firms struggling to reach their potential.

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Fri, 11 Jan 2019 20:16:48 +0000https://www.brookings.edu/?p=557286

Foresight Africa 2019 illuminates the priorities of the continent in the coming year with recommendations for tackling the challenges that lie ahead. In this edition, AGI scholars and invited experts delve into six overarching themes on challenges and opportunities for Africa to achieve shared prosperity and inclusive growth.

As 2019 begins, reasons for optimism about Africa’s ability to capitalize on the progress achieved in recent years and to advance the region’s economic potential abound. Across the continent, economic growth is projected to expand at the fastest pace in five years. Nearly half of the world’s fastest growing economies this year will be African, and massive opportunities exist for the private sector in African markets. Business environments are improving thanks to widespread reform efforts, and Africa’s leadership and institutions are more assertive in advancing the continent’s agenda. Our authors document why Africa is the world’s next big growth market and recommend strategies for successfully navigating the region’s business landscape.

On the trade and investment front, the recent African Continental Free Trade Agreement (AfCFTA) stands to knock down barriers to intra-regional trade and investment, thus accelerating industrialization, and facilitating economic diversification and inclusion. Our authors assess the potential of the AfCFTA and analyze Africa’s investment and trade relations with the likes of the U.S. and China.

Although economic growth and investment prospects bring hope, extreme poverty and state fragility prevail in parts of Africa. Additionally, while Africa’s large working age population is a potential economic boon, a stagnant industrial sector and the increasing adoption of labor-saving technologies in production present a massive hurdle to overcome before dividends can be realized. Authors offer strategies for countries to secure large-scale employment opportunities for youth and argue for institutional changes and new approaches to eliminate poverty and fragility so no country is left behind. One recurring recommendation is for solutions anchored in private sector development.

Overall, much of Africa’s economic development depends on governance that serves the interest of ordinary citizens, advances democratic values, and quashes corruption. In 2019, good governance with these goals in mind offers a path forward. Upcoming elections could strengthen democracy and governance systems and pave the way for economic reforms and growth. To sustain growth, we stress that many governments must balance between mobilizing financial resources for economic development and controlling indebtedness.

With its array of contributions, this year’s edition of Foresight Africa reflects both the diversity of the continent and the common threads that bind it together. With that aim, we set out to promote and inform a dialogue that will generate sound practical strategies for achieving shared prosperity across the continent. Our goal is to initiate a global conversation on Africa that brings in perspectives from the region, the U.S., and elsewhere.

We hope you will engage with us by commenting on our Foresight Africa papers, blog posts, and graphics, and by sharing your thoughts on the top priorities this year. You can use #ForesightAfrica and follow the debate or send your thoughts to @BrookingsGlobal or @BSangafowaCoul to join the conversation on Twitter. You can also leave comments on our related blog posts.

Widespread protests in Sudan over economic hardship

At least 40 people have been killed in Sudan during near-daily protests over the past two weeks. The protests, which have occurred in cities across the country, were prompted by cash shortages, high levels of inflation, and the high prices of staple goods such as bread and gas, which were exacerbated by Sudanese President Omar Hassan al-Bashir’s decision to end fuel and wheat subsidies.

While protests began in response to economic hardship and low living standards, they have morphed into general anger at Bashir’s government. Sudan’s political opposition is now pushing for the end of Bashir’s regime and the creation of an interim government, and has called for a continuation of protests to demand that Bashir step down.

In response, Sudanese officials have blocked access to social media platforms used to organize protests, declared emergency laws and curfews, and suspended classes at schools and universities across the country. Security forces have responded to protestors with force, including the use of live ammunition.

In a recent speech, Bashir promised wage hikes and appealed to patriotism to discourage protestors, while blaming Sudan’s economic hardship on international sanctions. The central bank governor has additionally said that Sudan is seeking funding from other countries to ease the economic crisis.